Oregon workers earning the lowest wages would benefit hugely from one-time state aid – Oregon Capital Chronicle
The experience of the current pandemic has taught us valuable public policy lessons. One of them is that cash payments work.
Providing money directly to low-wage families struggling to make ends meet alleviates economic hardship and improves well-being.
The Oregon Legislature now has an opportunity to apply that lesson and uplift underpaid Oregonians. House Bill 4157 proposes to provide one-time payments to Oregonians who earn low wages.
These workers were going through a difficult time before the Covid emergency, which brought new challenges. The economic disruption caused by the pandemic has driven up the cost of many goods. Inflation means dollars don’t stretch as far as they used to, which is especially problematic for families surviving on low wages. It puts basic necessities such as food and shelter even further out of reach.
Direct cash payments are a proven way to alleviate economic hardship. Studies of recent federal stimulus payments — similar to those proposed in HB 4157 — show low-wage Oregonians used the money primarily to pay for essentials like food and housing.
With more money, households experienced reduced levels of anxiety and depression – an outcome with long-term benefits, especially for children.
Oregon’s economy should also benefit from the proposed legislation. These one-time payments will go to households that have taken advantage of the federal earned income tax credit. Eligible families tend to spend their tax refunds quickly on local businesses as they make purchases to meet their basic needs. These expenditures generate more economic activity.
Researchers estimate that each federal tax refund dollar results in $1.40 to $1.58 activity in the economy, as local businesses in turn use these refund dollars to purchase goods and services needed to operating their business and to pay employees, who in turn spend their earnings.
HB 4157 offers an efficient way to deliver payments, building on the federal tax credit, which is already well targeted to those in need. The legislation directs the Oregon Department of Revenue to issue payments of $600 for individuals and $1,200 for couples who received the earned income credit for the 2020 tax year. the Department of Revenue already knows who claimed the credit that year, so it can issue the payments without anyone having to fill out additional forms.
There is a gap in the law that deserves to be pointed out. Because eligibility is based on tax forms filed for the 2020 tax year, the bill excludes a group of Oregon workers who would be eligible for the payment if the 2022 tax year were used. in place.
Last year, the Legislature rightly extended the state income tax credit to immigrant workers who would otherwise be eligible but for the fact that they file their taxes using an ID number. individual tax number (ITIN), rather than a social security number.
These immigrant workers also struggle to support their families on low wages, while doing some of the toughest — and often essential — work in our state. Fundamental fairness demands that these families not be left behind.
Fortunately, there is a solution. During the pandemic, the legislature helped create the Oregon Worker Relief Fund to provide assistance to immigrant workers excluded from federal relief programs. This structure remains in place.
The Legislature can and should use it to reach workers who would otherwise qualify for the one-time payment through the Department of Revenue. At the same time, lawmakers should ensure that the Oregon Workers Relief Fund receives the resources it needs to continue its important work.
If implemented, HB 4157 will provide valuable insight to policy makers on how ongoing cash payments can benefit families today. Because a policy as good as HB 4157 is, a one-time payment is insufficient to ensure that Oregonians avoid chronic economic hardship and its lasting damage.
HB 4157 will improve the well-being of low-wage workers in Oregon today, while heralding a future where all Oregonians experience economic security. Lawmakers should waste no time approving it.